New Chilean leader espouses Pinochet’s economics, not abuses

By Michael Smith and Sebastian Boyd
Bloomberg News / January 24, 2010

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SANTIAGO, Chile - Last June, Chilean billionaire Sebastian Pinera became convinced he’d win the presidency of the South American country.

The Santiago-based polling firm Centro de Estudios Publicos had found that support for the center-left governing coalition was split between two presidential candidates, robbing it of the votes needed to beat Pinera.

The new leader, who was elected last week, amassed his fortune by setting up Chile’s first credit card network and turning around a struggling airline. He decided to invest more in his own election in June, says Jose Miguel Izquierdo, Pinera’s political operations director.

“That’s when we said, ‘We can win this,’ ’’ Izquierdo said, banging his fist on his desk at campaign headquarters in a Santiago mansion. “It’s money on the table. When he feels like he’s going to lose, he stops investing.’’

By last week’s runoff election, Pinera had spent at least $13.6 million on the campaign and the bet paid off.

Pinera, 60, won the contest against onetime President Eduardo Frei, a Christian Democrat, unseating the center-left coalition that had governed Chile since dictator Augusto Pinochet was forced from power in 1990.

The victory marks a political shift in Chile, a nation of 17 million people that straddles 2,547 miles of the Andes Mountains from its northern border with Peru to Cape Horn.

Candidates of the governing coalition, known as the Concertacion, had won all four presidential elections since 1989 on pledges of erasing memories of Pinochet. His regime murdered more than 3,000 people, tortured 28,000, and forced thousands into exile, according to government estimates.

In last week’s election, Chileans chose a president with ties to the dictator who led the 1973 coup that left Socialist President Salvador Allende dead. Pinera managed a 1989 presidential campaign for Hernan Buchi, Pinochet’s former finance minister.

Pinera won with support from two parties founded by former Pinochet collaborators - the National Renovation party and Independent Democratic Union. Two of his campaign aides held posts in the dictatorship; a third is a former Pinochet minister.

Pinera, who pilots a helicopter and hikes a park he owns in southern Chile, won the election even though a December poll found that 73 percent of Chileans remain disdainful of Pinochet’s violent regime.

“The fact that the candidate who represents the parties that supported Pinochet has won shows how much Chile has changed,’’ said Patricio Navia, a Chilean political scientist at New York University.

“Pinera himself opposed the dictatorship, but some of his close allies defended Pinochet,’’ says Navia.

Pinera, a Harvard University-trained economist and former Citigroup executive, said during his campaign that he embraces Pinochet’s economic policies of cutting corporate taxes and encouraging investing in the country, and abhors the rule of terror.

“I have condemned human rights violations all my life, with no hesitation,’’ Pinera says. “Human rights are sacred. Our government will be a government of the future.’’

The billionaire pledges to expand the Concertacion’s health care and jobs programs for the middle class and poor, and vowed to help small businesses.

Pinochet, who died in 2006, laid the foundation for today’s economy in Chile. He staffed ministries with so-called Chicago Boys, disciples of University of Chicago economist Milton Friedman, who promoted balanced budgets, low state spending, and private pension systems.